FX trade was very light in the lead up to the FOMC announcement, with major dollar pairings idling inside of familiar ranges. EUR-USD travelled a 1.3900-25 band, while USD-JPY traded 101.50-60. USD-CAD was bid up in early dealings, posting a 1.1199 peak, keeping 1.1200 barrier options intact. The FOMC did as was expected, cutting its asset purchase program by $10 bln, and adding new forward guidance language, while perhaps indicating a quicker tightening pace. The markets sold Treasuries, taking yields higher, sold equities, and bought dollars across the board. EUR-USD fell under 1.3810 from 1.3920, as USD-JPY shot up to near 102.70 from 101.70. Cable plunged nearly 100 points to near 1.6510, as USD-CHF moved over 0.8800. USD-CAD made multi-year highs near 1.1270.

[EUR, USD]EUR-USD traded a narrow 1.3600-25 ranges through the morning session, and into the FOMC announcement. From there, the less dovish market take lifted the dollar across the board, sending EUR-USD to lows under 1.3810, from near 1.3920. We continue to view EUR-USD as overvalued relative to Eurozone versus U.S. fundamentals, especially with the Fed announcing another $10 bln worth of tapering. The move under March 11 low of 1.3834 could open the selling floodgates looking forward.

[USD, JPY]USD-JPY managed 101.69 highs in London, and eased back to 101.50. There was talk of Japanese year-end related hedging and repatriation flows this week, there was little sigh of this action through the morning. USD-JPY apparently took a cue from firmer Treasury yields ahead of the FOMC, moving up over 101.70 from near 101.50 into the announcement. Low liquidity likely exaggerated the modest move, though all were buyers after the Fed, which resulted in USD-JPY shooting up to 102.68 highs from near 101.70.

[GBP, USD]U.K. government budget for 2014-15 had little market impact. Chancellor Osborne announced upgraded growth forecast in 2014 and 2015 while warning that public finances remained far from healthy. Cable was steady into the FOMC, though was slammed 100 points lower to near 1.6550, as the dollar surged across the board.

[USD, CHF]EUR-CHF ramped up briefly over 1.2200 after the FOMC announcement, as the jump in U.S. yields supported the dollar against the CHF. USD-CHF topped 0.8825, up from 0.8740 ahead of the announcement. The Fed's less dovish tone may keep downward pressure on the Swissy versus the dollar and euro.

[USD, CAD]USD-CAD spiked up to one-month highs of 1.1184 in London trade, taking out stops at 1.1150-60 in the process. The February 21 high of 1.1194 will bring some sellers into the market, while defense of 1.1200 barriers can be expected under the figure. Over 1.1200, the January 31 peak of 1.1224 will be the next target. CAD weakness remains in place following the dovish words from BoC's Poloz on Tuesday. USD-CAD blew through the 1.1200 mark after the FOMC announcement, taking the pairing to new multi-year highs of 1.1270. Barrier options at 1.1200 were cleared out, and stop loss buying was noted over the figure. Fresh bids are now seen coming in at 1.1200.